TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1526
X X X X Extracts X X X X
X X X X Extracts X X X X
....erred as "MP Entry Tax Act") (ii) Madhya Pradesh Commercial Tax Act, 1994 (hereinafter referred as "MPCT Act") and (iii) Madhya Pradesh Value Added Tax Act, 2002 (hereinafter referred as "VAT Act"). --------------------------------------------------------------------------- 2. The Assesses and appellants company are engaged in the activities of providing telecommunication services are herein after referred as "Assesse". --------------------------------------------------------------------------- W.P. No.6304/2011 has been filed by the Assesse being aggrieved by order dated 29.3.2010 passed by Assessing Authority and order dated 30.4.2011 passed by the Appellate Authority, by which, entry tax has been imposed under the M.P. Entry Tax Act for the for the period 2007-2008 over various goods like building material, plant & machinery, computer hardware, computer software, furniture fixers, office-equipment, vehicle, CWIP plant & machinery, SIM cards, recharge voucher, marketing material, etc. brought within the local area. W.P. No.6645/2012 has been filed by the Assesse being aggrieved by assessment order dated 16.4.2012 passed by the Assessment Authority, by which, entry tax ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/s. 53 of M.P. VAT Act, 2002 against the order dated 23.10.2012 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2005-2006 (entry tax). VATA No.13/2014 has been filed by the appellant u/s. 53 of M.P. VAT Act, 2002 against the order dated 22.7.2014 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2003-2004 (entry tax). VATA No.14/2014 has been filed by the appellant u/s. 53 of M.P. VAT Act, 2002 against the order dated 22.7.2012 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2003-2004 (entry tax). VATA No.2/2015 has been filed by the appellant u/s. 53 of M.P. VAT Act, 2002 against the order dated 3.9.2015 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2004-2005 (entry tax). VATA No.3/2015 has been filed by the appellant u/s. 53 of M.P. VAT Act, 2002 against the order dated 6.4.2015 passed in the appeal by M.P. Commercial Tax Appellate Board, Bhopal for the period 2005-2006 (entry tax). T.R. No.108/2017, T.R. No.109/2017 and T.R. No.110/2017 are references sent to this Court by M.P. Commercial Tax Appellate Board, Bhopal vide order dated 26....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under the provisions of MPCT Act and VAT Act, 2002 in view of the amendment under Section 8(3)(b) of the Central Sales Tax Act in order to availing the concessional rates and tax rebate by way of form 'C' etc. The aforesaid benefit of concession was given under the provisions of MPCT Act (now, VAT Act, 2002) to encourage the telecommunication sector as a whole so that the Assesse could spread their network throughout the country. That while obtaining the registration the Assesse Company has declared its activity as that of providing telecommunication service as its principal activity. The Assesse obtained the aforesaid registration as a matter of abundant caution which cannot be presumed that it has accepted the applicability of the Commercial Tax Act and the Central Sales Tax Act as there is no business of sale and purchase. The Apex Court in case of Bharat Sanchar Nigam Limited and Others Vs. Union of India & Others, reported in (2006) 145 STC 91 has already held that mobile service is nothing but an electromagnetic waves and radio frequencies which do not constitute goods and no sale of goods as such is involved in the activity of providing telecommunication services. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore, the Assesse by no stretch of imagination can be called as Dealer for the purpose of MP Entry Tax Act. The plant and machineries, electronic equipment etc. brought by the Assesse within the State of Madhya Pradesh in order to provide the telecommunication service which does not involve any processing of plant and machinery and any conversion of such plant and machinery into new or different commercial commodity does not constitute either used or consumption in the course of business by the dealer, hence, imposition of entry tax and penalty is wholly unjustified and arbitrary. 6. After notice, the State Government filed the return by submitting that the writ petition is not maintainable in which the Assesse has directly approached this Court against the assessment order or against the order passed by the first appellate authority without resorting the remedy of second appeal to the appellate board, hence, petition is liable to be dismissed on this preliminary grounds. On merit, it is submitted that the Assesse is engaged in the business of providing telecommunication services and purchased the goods in the course of business and also consuming/using such goods in order to provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the question whether the telecommunication service is covered under the Sales Tax/Commercial Tax and any element of sale of goods is involved in such activities was a doubtful issue, as such, the Assesse obtained the registration under the MPCT Act and the Central Sales Tax Act as a matter of abundant caution, but such registration can by no stretch of imagination make the Assesse a dealer and liable to pay Sales Tax/Commercial Tax. Thereafter Apex Court in case of Bharat Sanchar Nigam Limited (Supra) has held that the electromagnetic waves and radio frequencies do not constitute goods and no sale of goods as such is involved. The Assesse has brought various plants and machineries, electronic equipment etc. for installation in the State of Madhya Pradesh for the purpose of setting up the telecommunication network, but the Assesse is neither a dealer, nor carrying on business as defined under the MPCT Act, hence, not liable to pay the Entry Tax in its return. Since, the Assesse is not covered by charging section; no assessment could be made against it. According to Shri Nema, learned senior counsel appearing on behalf of the Assesse, Section 3 of the MP Entry Tax Act is a charging....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Dealers. 9. Shri Nema further submitted that there cannot be any charge of entry tax on the SIM ( Subscriber Identity Module ) card which is admittedly is not the good as per the decision of this Court passed in case of M/s Idea Cellular Ltd, Indore Vs. Assistant Commissioner of Commercial Tax, LTU, decided by order dated 03.01.2017 passed in W.P.No.7631/2014 that SIM Card is nothing but device which helps the service provider to identify the subscriber. It has been observed that service provider also enables the subscriber to receive the service by means of electromagnetic waves, hence, the SIM card cannot be termed to be a good and even under Article 366 (12) SIM is not good as it has no intrinsic value and are not marketable or transferable, hence, the questions of law framed by this Court is liable to be answered in favour of the Assesse and impugned orders passed by the Assessment Officer and Appellate Authority are liable to be set aside. 10. Shri Nema learned senior counsel also addressed us on the point that Art. 286 of the Constitution of India does not permit the State to levy tax on sale and purchase on the goods which takes place in the course of import or export ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has placed reliance over the latest judgement passed by the Bombay High Court in the case of Bharati Airtel Ltd Vs Mira Bhayandar Municipal Corporation, reported in 2017 SCC Online Bomb 8555 in which it has been held that E-charge could not be subjected to levy of LBT (Local Body Tax), but LBT is leviable on the entry of goods into the limits of city for consumption, use or sale and the Taxing Authority well within its power can levy LBT on SIM card and recharge voucher for SIM card and physical form. The provisions of Entry Tax Act are identical to the provisions of Section 127 of the Maharashtra Municipal Corporation Act, 1949. In view of the above, the issue is no more resintegra, hence, petitions as well as appeals are liable to be dismissed. 14. We have heard the learned counsel, gave anxious consideration to their submissions and perused the material available on record. 15. The core issue which is required to be answered first is that a dealer registered under the VAT Act, 2002 is only liable to pay Entry tax u/s. 3(1) of the Entry Tax Act. According to the Assesse it is company providing service not doing the business of sale and purchase of goods, therefore, not liable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....meaning in Entry Tax Act other than the meaning assigned in the VAT Act. 17. Section 3 of Entry Tax Act provides the incidence of charging of Entry Tax. As per Section 3(1), there shall be levied an Entry Tax on the entry in the course of business of a dealer of goods specified in Schedule-II into each local area for consumption, use or sale therein. As per Clause (iii) of Section 3(1), on entry of goods specified in Schedule-III, for consumption or use of such goods, but not for sale therein, there shall be a levy of Entry Tax. Therefore, as per Section 3(1), the Entry Tax is chargeable on a dealer if he brings the goods in his course of business within the local area either for sale, use or consumption as per Schedule-II or Schedule-III. Under sub-section (2)(a) of Section 3, the Entry Tax is payable on entry of such goods specified in Schedule-II and III by such person or class of person as notified by the State Government. As per proviso appended to Section 3(2), that if it is proved before the Assessing Authority that such goods have already been subjected to Entry Tax by any other person or dealer under this Act, then there shall be no levy of Entry Tax on a person or class ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... but not in the nature of buying or selling or distributing the goods as necessary to constitute "dealer" under the VAT Act read with Entry Tax Act. The Entry Tax was brought into force in the year 1976 when there was no concept of Service Tax which was introduced by Finance Act 1994 . The definition of 'dealer' is not confined to the business of selling and buying; it is also an activity of supplying or distribution of goods for cash or other valuable consideration. Sec2(i) of VAT Act defines the word Dealer which is as follows: (i) "Dealer" means any person, who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for deferred payment or for commission, remuneration or other valuable consideration and includes - (i) a local authority, a company, an undivided Hindu family or any society (including a co-operative society), club, firm or association which carries on such business; (ii) a society (including a co-operative society), club, firm or association which buys goods from, or sells, supplies or distributes goods to its \members; (iii) a commission agent, broker, a del-credere agent, an auctioneer or an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncern; and (ii) any transaction of sale or purchase of goods in connection with or incidental or ancillary to the trade, commerce, manufacture, adventure or concern referred to in clause (i), that is to say - (a) goods whether or not they are in their original form or in the form of second hand goods, unserviceable goods, obsolete or discarded goods, mere scrap or waste material; and (b) goods which are obtained as waste products or by-products in the course of manufacture or processing of other goods or mining or generation of or distribution of electrical energy or any other form or power; Therefore, the Assesse is covered under the provisions of Section 3(1) of Entry tax Act . 22. The Assesse is providing service of telecommunication and in order to do the business, brings the plant & machinery, equipment, etc. to the local area for the use and consumption, therefore, Assesse is subjected to the liability of Entry Tax. The main concern of the Assesses is in respect of payment of Entry Tax on a SIM Card. As held by the apex Court in the case of BSNL (supra), the SIM Card is not 'goods' and the company is not engaged in the business of selling the SIM Card. The contention ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....i Iyer, the learned Senior Counsel, to support his submission for a similar meaning being assigned in the present case. Suffice it to observe that the common-parlance meaning of the term "agriculture", in the context in which it has been used and is arising for determination before us, cannot be determined by reference to definitions given in other statutes. This we say for more reasons than one. Firstly, none of the statutes referred to by Shri Iyer, the learned Senior Counsel, can be called statutes in pari materia. Secondly, it is common knowledge that the definition coined by the legislature for the purpose of a particular enactment is often an extended or artificial meaning so assigned as to fulfil the object of that enactment. Such definitions given in other enactments cannot be freely used for finding out meaning to be assigned to a term of common parlance used in an altogether different setting. And lastly, as Justice G.P. Singh points out in Principles of Statutory Interpretation (9th Edn., 2004, at p. 163): "[I]t is hazardous to interpret a statute in accordance with a definition in another statute and more so when such statute is not dealing with any cognate subject or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e. But the Apex Court has not considered the question whether the SIM cards are capable of being used which is a relevant consideration for charging LBT." Even otherwise it is important to mention here that the Assesses had obtained the registration under the VAT Act and supplied the list of goods chargeable under the VAT Act. One hand assesse is counting with dealer registration certificate and other hand challenging the applicability of VAT Act and Entry Tax. 25. That as per definition of 2(1)(aa) " entry of goods into a local area" means " entry of goods into that local are from any place outside" hence assesse is liable to pay entry tax on goods brought from outside . Hence Entry tax is chargeable on entry of good into local area brought from outside other than that local area. The Division Bench of this Court in the case of Sanjay Trading Co. V/s. Commissioner of Sales Tax & others : (1994) STC 589, had held that M.P. Entry Tax Act is intended to levy Entry Tax on entry of specified goods into the local area for consumption, use or sale. The Entry Tax is not a tax on goods, but a tax on entry of goods into the local area for particular purpose. Hence it is immaterial whethe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the AICTE from time to time." 26. In Bharat Coop. Bank (Mumbai) Ltd. v. Employees Union12 this Court again considered the difference between the inclusive and exhaustive definitions and observed: (SCC p. 695, para 23) "23. ... when in the definition clause given in any statute the word 'means' is used, what follows is intended to speak exhaustively. When the word 'means' is used in the definition ... it is a 'hard-and-fast' definition and no meaning other than that which is put in the definition can be assigned to the same. ... On the other hand, when the word 'includes' is used in the definition, the legislature does not intend to restrict the definition: it makes the definition enumerative but not exhaustive. That is to say, the term defined will retain its ordinary meaning but its scope would be extended to bring within it matters, which in its ordinary meaning may or may not comprise. Therefore, the use of the word 'means' followed by the word 'includes' in [the definition of 'banking company' in] Section 2(bb) of the ID Act is clearly indicative of the legislative intent to make the definition exhaustive and would cover only those banking companies which fall within t....